Japan’s Mitsui & Co Ltd has forecasted a 15.4% decrease in net profit for the fiscal year ending March 2025, citing a weaker performance in its energy sector. The trading giant anticipates its net profit to reach 900 billion yen ($5.7 billion) for the mentioned period.
The company’s recent financial results for the year ended March 2024 showed a 6% decline in net profit, amounting to 1.1 trillion yen. This decrease was attributed to reduced prices of key commodities such as metallurgical coal, crude oil, and gas. However, Mitsui surpassed analysts’ expectations, as a poll conducted by the London Stock Exchange Group (LSEG) had forecasted a net profit of 973 billion yen.
Mitsui’s CEO, Kenichi Hori, attributed the decline in profit to smaller one-off gains. He outlined the company’s three-year business plan, announced in May 2023, which aims for a net profit of 920 billion yen by the fiscal year ending March 2026.
Under this plan, Mitsui intends to invest 1.8 trillion yen in growth segments, with 600 billion allocated to energy transition initiatives such as natural gas, next-generation fuels, and decarbonization efforts.
Hori emphasized the company’s commitment to establishing a geographically-diversified LNG (liquefied natural gas) portfolio and completing promising LNG projects to enable Japanese customers to diversify their procurement.
Regarding the Arctic LNG 2 project in Russia, in which Mitsui holds a stake, Hori mentioned that the company will proceed cautiously, consulting with the Japanese government and relevant stakeholders.
Additionally, Mitsui announced the sale of its stake in Indonesia’s PT Paiton Energy, a coal power plant operator, to a unit of Thai energy firm Ratch Group PCL and another unit of PT Medco Daya Abadi Lestari. This transaction is expected to generate a profit of 44 billion yen in the April-June quarter.
Following the sale, Mitsui’s net power generation capacity will stand at 9.6 gigawatts, with coal-fired generation accounting for 8%, down from 16% as of March 2024.
The company’s decision to repurchase up to 40 million of its shares, worth up to 200 billion yen, by September 20, aims to enhance shareholders’ returns.
Mitsui’s financial performance reflects ongoing challenges in the energy sector and the company’s strategic responses to market dynamics.
